LONDON, UK: Cable will retain dominance in the global multi-channel TV market over the next five years but the threat from the new generation of digital and internet protocol (IP) services will take its toll, predicts Ovum, one of the Datamonitor group of companies.
Globally cable TV will reach 573 million households by 2015*, but will grow by an average of only 3% per year for that period. The strongest growth will come from internet protocol TV (IPTV) with a compound annual growth rate (CAGR) of 24% over the next five years to reach 109 million households.
Meanwhile digital terrestrial TV (DTT) (which includes services such as Freeview in the UK), will grow by an average of 18% annually to reach 211 million households by 2015.
What will fuel DTT growth
Jonathan Doran, Ovum analyst and author of the report, commented: "DTT growth will be fuelled primarily by the further allocation of spectrum for free-to-air services and the implementation of analogue switchover deadlines, while telcos will continue to aggressively market their IPTV offerings as they play catch-up with the longer-established cable and satellite pay-TV platforms. Satellite pay-TV will remain stable in the face of competition from emerging low-cost services as it continues to attract a core of higher-value subscribers than cable."
Satellite TV will experience healthy average annual growth of 10% over the next five years to reach 419 million households worldwide. In the UK, satellite will retain its dominance reaching 13.7 million households by 2015, compared to just 3.9 million for cable. In second place is digital terrestrial, which will reach 11 million UK households in 2015, up only slightly from 10.3 million in 2010. Telco-delivered IPTV services will remain relatively insignificant in the UK market, reaching only 1.3 million UK households by 2015. However, this is more than double the 2010 figure of 610 000, showing relatively strong growth.
Cable in decline
In the US cable will retain its dominance but the number of households subscribed will drop from 60 million in 2010 to 54 million in 2015 as IPTV and internet-based alternatives continue to steal market share. Doran commented: "This is the continuation of a decline that's already begun as households subscribing to cable dropped by four million between 2007 and 2010.
"This trend towards cancelling subscriptions, or 'cord cutting' has arisen due to a combination of the economic downturn and the growing availability of attractive low-cost or free digital terrestrial and internet-based options. It's not just cord-cutting however; some cable customers will also defect to more innovative and better value IPTV and satellite pay-TV options."
Ovum expects global pay-TV revenues to grow by nearly 40% by 2015, but this figure masks significant variations between markets as well as platforms.
*Multichannel TV Households and Revenue Forecast: 2010 - 15
Datamonitor Datamonitor is a leading provider of online database and analysis services for key industry sectors. We help our clients, 5000 of the world's leading companies, to address complex strategic issues. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for seven industry sectors: automotive, consumer markets, energy, financial services, pharmaceuticals and healthcare, technology, transport and logistics. Go to: http://www.datamonitor.com
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